EXPLANATORY STATEMENT
Select Legislative Instrument 2007 No. 232
Issued by the Authority of the Parliamentary Secretary to the Minister for
Agriculture, Fisheries and Forestry
Primary Industries (Excise) Levies Act 1999
Primary Industries (Customs) Charges Act 1999
Primary Industries (Excise) Levies Amendment Regulations 2007 (No. 8)
Primary Industries (Customs) Charges Amendment Regulations 2007 (No. 6)
Section 8 of the Primary Industries (Excise) Levies Act 1999 (the Levies Act) and section 8 of the Primary Industries (Customs) Charges Act 1999 (the Charges Act) provide that the
Governor-General may make regulations prescribing matters required or permitted by those Acts to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to each Act.
The purpose of the Regulations is to implement a proposal by Cherry Growers of Australia (CGA) to increase the cherry research and development (R&D) levy and export charge and to establish a cherry marketing levy and export charge, payable to Horticulture Australia Limited (HAL). HAL is the relevant industry services body for the administration of the cherry levy and charge for marketing and R&D. HAL co-ordinates marketing and R&D programs for many horticultural industries and is funded by statutory levies and export charges, voluntary contributions and Australian Government matching funding for eligible R&D expenditure. This matching funding is provided under the Horticultural Marketing and Research and Development Services Act 2000.
Specifically, the Regulations:
- increase the cherry R&D levy and export charge rate from 1 cent per kilogram to 4 cents per kilogram; and
- establish a cherry marketing levy and export charge rate of 3 cents per kilogram on all varieties of fresh cherries collected at the first point of sale.
Primary Industries (Excise) Levies Regulations 1999
Subclause 4(1) of Schedule 15 to the Levies Act provides that regulations may fix rates of levy for marketing purposes.
Subclause 4(3) of Schedule 15 to the Levies Act provides that regulations may fix rates of levy for R&D purposes.
Subclause 6(4) of Schedule 15 to the Levies Act provides that before the Governor-General makes regulations to fix rates of levy for marketing, the Minister must take into consideration any relevant recommendations made to the Minister by HAL.
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Subclause 6(6) of Schedule 15 to the Levies Act provides that before the Governor-General makes regulations to fix rates of levy for R&D, the Minister must take into consideration any relevant recommendations made to the Minister by HAL.
Subclause 6(7) of Schedule 15 to the Levies Act requires HAL to consult with the body that is the eligible industry body for the relevant horticultural product before recommending rates of levy for marketing to the Minister.
Subclause 6(8) of Schedule 15 to the Levies Act requires HAL to consult with the body that is the eligible industry body for the relevant horticultural product before recommending rates of levy for R&D to the Minister.
Subclause 6(9) of Schedule 15 to the Levies Act requires that a recommendation made by HAL to the Minister be accompanied by a written statement of the views of the industry body consulted in relation to the recommendation.
The Primary Industries (Excise) Levies Regulations 1999 prescribe CGA as the eligible industry body with which HAL must consult in relation to cherries. HAL recommended the changes in operative rates of levy to the Minister after consultation with CGA. The Regulations give effect to the recommendations of HAL, which are consistent with the cherry industry's request.
Primary Industries (Customs) Charges Regulations 2000
Subclause 3(3) of Schedule 10 to the Charges Act provides that regulations may fix rates of export charge for marketing purposes.
Subclause 3(5) of Schedule 10 to the Charges Act provides that regulations may fix rates of export charge for R&D purposes.
Subclause 5(3) of Schedule 10 to the Charges Act provides that before the Governor-General makes regulations to fix rates of export charge for marketing, the Minister must take into consideration any relevant recommendations made to the Minister by HAL.
Subclause 5(5) of Schedule 10 to the Charges Act provides that before the Governor-General makes regulations to fix rates of export charge for R&D, the Minister must take into consideration any relevant recommendations made to the Minister by HAL.
Subclause 5(6) of Schedule 10 to the Charges Act requires HAL to consult with the body that is the eligible industry body for the relevant horticultural product before recommending rates of export charge for marketing to the Minister.
Subclause 5(7) of Schedule 10 to the Charges Act requires HAL to consult with the body that is the eligible industry body for the relevant horticultural product before recommending rates of export charge for R&D to the Minister.
Subclause 5(8) of Schedule 10 to the Charges Act requires that a recommendation made by HAL to the Minister be accompanied by a written statement of the views of the industry body consulted in relation to the recommendation.
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The Primary Industries (Customs) Charges Regulations 2000 prescribe CGA as the eligible industry body with which HAL must consult in relation to cherries. HAL recommended the changes in operative rates of export charge to the Minister after consultation with CGA. The Regulations give effect to the recommendations of HAL, which are consistent with the cherry industry's request.
CGA’s purpose in increasing the cherry R&D levy and charge and establishing a cherry marketing levy and charge is to fund the objectives identified in its 2002-2006 Strategic Plan and the 2005 Government funded Taking Stock and Setting Directions: A working plan for the Australian Cherry Industry report. A key priority is to undertake R&D work on fruit fly management to achieve market access to the important markets of Taiwan, China, New Zealand and the USA. The lack of a marketing levy has resulted in the industry being unable to organise and finance marketing programs.
Based on an average annual collection, the cherry R&D levy and charge currently raises $74,000. The increase in the R&D levy and charge together with the new marketing levy and charge are expected to raise around an additional $440,000 to $640,000 annually (depending on seasonal conditions). After allowing for the HAL management fee, the additional R&D monies raised would require the Australian Government to provide approximately $90,000 to $190,000 annually in additional matching funding.
CGA conducted a thorough consultation campaign with all known potential levy payers, in line with the Australian Government’s levy principles and guidelines. Following agreement at the August 2005 Annual General Meeting of CGA on the need to pursue an increase in the cherry levy, the CGA President and Secretary conducted grower meetings in all major growing regions in June 2006. A ballot was conducted by the Australian Electoral Commission in July 2006 to introduce a new marketing levy at a rate of 3 cents per kilogram on all varieties of fresh cherries for domestic and export sales. Of the valid votes returned 136 growers voted for the new levy and charge and 129 voted against. A further independent ballot was conducted in September-October 2006 on a proposal to increase the R&D levy and charge to 4 cents per kilogram. Of the valid votes returned 134 growers voted for the increase and 56 voted against.
Details of the Regulations are contained in the attachment.
The Regulations are legislative instruments for the purposes of the Legislative Instruments Act 2003.
The Office of Best Practise Regulation was consulted in the preparation of the Regulations. A Regulation Impact Statement is attached, as Annex A.
The Regulations commence on 1 September 2007, the start date requested by CGA.
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ATTACHMENT
DETAILS OF THE PRIMARY INDUSTRIES (EXCISE) LEVIES AMENDMENT REGULATIONS 2007 (No. 8)
Regulation 1 – Name of Regulations
This Regulation provides for the name of the Regulations to be the Primary Industries (Excise) Levies Amendment Regulations 2007 (No. 8).
Regulation 2 – Commencement
This Regulation provides for the commencement date to be 1 September 2007.
Regulation 3 – Amendment of Primary Industries (Excise) Levies Regulations 1999
This regulation provides that Schedule 1 amends the Primary Industries (Excise) Levies Regulations 1999.
Schedule 1 – Amendments to Schedule 15, Part 5
Item [1] – substitutes the two notes in Clause 5.2 with one note. The change substitutes the wording “Note 1” with the word “Note” and omits Note 2 which states “Clause 5.3 intentionally not used”.
∙ The note indicates that levy is not imposed on leviable horticultural products that are exported from Australia.
Item [2] – substitutes clause 5.4 with new clauses 5.3 and 5.4.
- clause 5.3 sets an operative rate of marketing levy on fresh cherries of 3 cents per kilogram.
- clause 5.4 sets an operative rate of R&D levy on fresh cherries of 4 cents per kilogram.
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DETAILS OF THE PRIMARY INDUSTRIES (CUSTOMS) CHARGES AMENDMENT REGULATIONS 2007 (No. 6)
Regulation 1 – Name of Regulations
This Regulation provides for the name of the Regulations to be the Primary Industries (Customs) Charges Amendment Regulations 2007 (No. 6).
Regulation 2 – Commencement
This Regulation provides for the commencement date to be 1 September 2007.
Regulation 3 – Amendment of Primary Industries (Customs) Charges Amendment Regulations 2000
This regulation provides that Schedule 1 amends the Primary Industries (Customs) Charges Regulations 2000.
Schedule 1 – Amendments to Schedule 10, Part 5
Item [1] – substitutes the two notes in Clause 5.2 with one note. The change substitutes a new Note for Note 1 and omits Note 2 which states “Clause 5.3 intentionally not used”.
∙ The note indicates that charge is not imposed on horticultural products that are exported from Australia if a levy on that product has already been paid.
Item [2] – substitutes clause 5.4 with new clauses 5.3 and 5.4.
- clause 5.3 sets an operative rate of marketing charge on fresh cherries of 3 cents per kilogram.
- clause 5.4 sets an operative rate of R&D charge on fresh cherries of 4 cents per kilogram.